ODAC Newsletter - 9 May 2008
Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.
Last week began with a brief weakening of the oil price in response to the latest interest rate adjustment by the Fed, this was however extremely short-lived. By mid-week oil was breaking records again going past $120/barrel. The future of the oil price was the subject of a widely quoted report from Goldman Sachs as well as a recent report by CIBC. Both reports anticipate impending supply constraints, the effects of which will force demand rationing in the OECD nations, especially in the area of transport fuel. So far there is no evident change in strategy from the leaders of the US or the UK with both Messrs Bush and Brown still calling for OPEC to raise production. Malcolm Wicks in the meantime spent time this week looking at an extinct volcano in the US in search of a fix to increase the potential recoverable reserves from the declining North Sea oil fields. This puts an interesting slant on the delicate position in which Gordon Brown found himself this week with regard to calls for a referendum on Scottish Independence.
The deadline for bids for British Energy has arrived. The French company EDF appears to be the frontrunner. This week the Tories asked for greater transparency on the sale, which is to lead Britain’s nuclear future. Alan Duncan, the shadow business secretary, asserted that "Our energy security . . . should be above party politics”, a quote worth making note of. In the Guardian Michael Meacher provided commentary on the challenges inherent in betting on a nuclear renaissance.
The food crisis continued to dominate much ink during the week. A knock on effect of the high oil price is rising fertilizer costs. According to reports, farmers in the bread basket of Kenya have planted only a third of what they planted last year due the high cost of fertilizer, which has more than doubled in a few months. High food prices and fear of shortages are leading to greater protectionism around food. This week saw discussion in Asia of a ‘rice OPEC’ and reports that Saudi Arabia is making plans for stockpiles.
In economic news this week the Ernst & Young Item Club revised its forecast for UK growth downwards, in response to rising oil prices. The Labour party felt the pain of the downturn in the ballot box as they were routed in local council elections. The electorate clearly doesn’t want the good times to end. Reports this week demonstrated that while rising food prices are driving up inflation Britons are throwing away £9bn/year of ‘avoidable food waste’. In the meantime, in the same week as the AA reported an 11% increase in the cost of motoring in the last year alone, the Office of National Statistics released figures which showed no corresponding decrease in car travel. Some habits are hard to break.
Alert: If you are a UK voter you may want to write to your MP to encourage them to sign an Early Day Motion tabled by John Hemming MP, Chair of APPGOPO. EDM 1453 calls on the government to urgently review its prediction as to when peak oil will occur, in the light of rising energy and food prices. You can find out who your MP is and email them through www.writetothem.com
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Oil prices rallied to fresh highs this morning, after an analyst at Goldman Sachs warned that prices could rise to $200 a barrel within two years.
Concerns over supply problems in Nigeria, Africa’s largest oil producer, helped to propel US crude futures for June delivery to a high of $120.70 per barrel. London Brent crude futures also hit a record of $119.03 per barrel.
Strikes and a campaign of attacks by militants have cut Shell’s production in Nigeria by about 164,000 barrels per day.
The report from Goldman Sachs’ New York-based energy analyst, Arjun N. Murti, claimed that oil prices could rise to between $150 and $200 per barrel because of shortages in global supply growth and rising demand from developing countries.
“The possibility of $150 to $200 per barrel seems increasingly likely over the next 6 to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,” said the report, dated May 5.
Mr Murti first predicted a super-spike in oil prices to as high as $105 per barrel in 2005.
Members of the Organization of Petroleum Exporting Countries (Opec), which produce 40 per cent of the world’s oil, are unable to lift production significantly while rising domestic consumption in member countries, as well as in China, India and other emerging economies, is compounding the supply shortage elsewhere, the report said.
“The core of our super-spike view has been that a lack of adequate supply growth coupled with price-insulated non-OECD demand growth” is forcing up prices, the report said.
“Non-Opec supply is struggling to grow, with notable declines being seen in Mexico and Russia showing signs of rolling over following an extended period of rapid growth.”
Goldman’s crude oil price forecasts were also revised higher for the period 2008 to 2011. The 2008 estimate for the benchmark West Texas Intermediate contract was lifted to $108 a barrel from $96, the 2009 forecast to $110 from $105, and 2010 to 2011 estimates are at $120 up from $110.
Oil rose to a record above $125, set for the biggest weekly gain since March last year, as concern violence in Nigeria will cut supply spurred speculative buying.
Assaults in Africa's biggest producer have increased this month as U.S. demand for the country's crude starts to peak before the start of this summer's motoring season. OPEC said yesterday it doesn't need to increase supplies, even as its president warned prices may reach $200 a barrel.
"In the last couple of weeks attacks in Nigeria have been getting worse," said Andy Sommer, an analyst with HSH Nordbank in Hamburg. "Also, the view that oil can go to $200, even though everyone knows it's not the base-case scenario, is bringing in investor flows."
Crude oil for June delivery climbed as much as $1.43, or 1.3 percent, to $125.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $125.05 at 11:27 a.m. London time. Oil has risen 7.4 percent this week, the biggest weekly gain since March 23, 2007. Prices have doubled in the last year.
Brent crude oil for June settlement jumped as much as $1.60, or 1.3 percent, to a record $124.44 a barrel on London's ICE Futures Europe exchange. It was at $124.31 at 11:27 a.m. London time.
Royal Dutch Shell Plc's Nigerian output, which was cut by militant attacks, likely will return within two weeks, a government official said yesterday. Shell is losing about 164,000 barrels a day as a result of political violence in the country.
Oil's records are less due to "fundamental changes" than "the increasing proportion of investor demand driving prices higher," said Eugeb Weinberg, an analyst at Commerzbank AG in Frankfurt. "I think we'll achieve a price of $150 in the coming six months."
The Organization of Petroleum Exporting Countries said in a statement yesterday there's no need to raise output as "the considerable depreciation in the U.S. dollar" rather than limited supply is behind record prices. OPEC President Chakib Khelil said the weaker dollar may drive prices to $200 a barrel.
OPEC will probably meet before its next scheduled conference in September, Shokri Ghanem, chairman of Libya's National Oil Corp., said today.
U.S. distillate stockpiles declined 107,000 barrels to 105.7 million, the Energy Department reported on May 7. Refineries in the U.S. operated at 85 percent last week, down from 89 percent the year before, the data showed.
"Diesel is the main driver for the oil rally right now with the U.S., Europe, Asia and Middle East short of cargoes," said Tetsu Emori, a fund manager at Astmax Ltd. in Tokyo. "The Nigerian shutdown isn't helping as that type of crude oil is good to make gasoline and diesel."
Total SA, Europe's third-largest oil company, said first-quarter profit rose 18 percent, boosted by record crude and higher natural gas prices.
Net income climbed to 3.6 billion euros ($5.6 billion), from 3.05 billion euros a year earlier, the Paris-based company said today in a statement. Excluding one-time items, changes in inventories and the value of a stake in drugmaker Sanofi-Aventis SA, profit beat analysts' estimates.
Total's profit increase lagged behind European competitors Royal Dutch Shell Plc and BP Plc, which posted jumps of 25 percent and 63 percent, respectively. Total was hurt by the U.S. currency's 8.2 percent slide during the first quarter, which reduced dollar-denominated earnings when converted into euros.
"Net income was at the higher end of expectations," Chicuong Dang, a Paris-based analyst at Richelieu Finance, which oversees about $6.4 billion, said by phone. "Production was as expected but refining and petrochemicals came in lower."
Total fell 21 cents, or 0.4 percent, to 54.30 euros in Paris. The shares are down 4.5 percent since the beginning of the year.
Oil and gas production was 2.426 million barrels of oil equivalent a day, compared with 2.431 million barrels a day a year earlier. Adjusted profit was 3.25 billion euros, beating the 3.24 billion-euro median estimate of nine analysts surveyed by Bloomberg News.
Output from new fields in Angola and the Middle East was countered by the shutdown of the North Sea Elgin-Franklin deposits, Total said.
U.S. oil futures breached $100 a barrel for the first time in January and averaged $97.82 during the first quarter, up 68 percent from a year earlier. Gas jumped 22 percent on average.
Still, Total and other oil companies such as Royal Dutch Shell and BP are being squeezed by contracts giving resource- rich nations a bigger share of output when crude prices rise.
Projects in Qatar, the U.K. and Congo "set the stage for the group to report significant production growth in 2008," Total said Feb. 13. Chief Executive Officer Christophe de Margerie has pledged to raise production by an average 4 percent a year until 2010.
"We'll clearly have production growth this year," Chief Financial Officer Robert Castaigne said on a conference call today. Total is "extremely cautious" about specific annual output targets since they have been missed in the past, he said.
Castaigne said he's "optimistic" about reaching a target to raise production by an average 4 percent a year until 2010 based on oil at $60 a barrel. "If it is $100 a barrel, this should be about 3 percent a year," he said.
Total is a shareholder in Dolphin Energy Ltd. along with Occidental Petroleum Corp. and Abu Dhabi, which operates a pipeline allowing the export of gas to the United Arab Emirates from Qatar's offshore North Dome field.
Total is also counting on its Jura gas and condensate discovery off the northeastern coast of Scotland to raise output this year. The North Sea well will start production "within a few weeks," Castaigne said.
Capital expenditure will rise 19 percent this year to a record $19 billion, the company said. About a quarter of the increase is related to the euro-dollar exchange rate and about half to higher project costs, de Margerie has said.
Total's reserve-replacement rate was 78 percent last year, excluding acquisitions and divestments in Venezuela. Proven and probable reserves were 20 billion barrels of oil equivalent at the end of 2007.
WASHINGTON - President George W. Bush during his visit to Saudi Arabia next week will again ask OPEC to increase oil production, a senior White House official said on Wednesday as soaring oil prices hit new record highs.
Bush will visit Saudi Arabia on May 16 during a trip to the Middle East and will have a message for oil suppliers similar to his January trip.
"Suppliers of oil as they consider their pricing policies and as they consider their production targets need to take into account the economic health of the global community," White House national security adviser Stephen Hadley said.
The price of U.S. crude oil hit a record $123.80 a barrel on Wednesday at the New York Mercantile Exchange. Rising oil prices will be passed on to consumers at the pump in higher gasoline costs.
Asked whether Bush would seek an increase in production from OPEC during his talks with Saudi officials, Hadley replied: "I am confident he will. He has in the past."
Bush in January failed to convince OPEC to increase production, and the oil group held production steady.
"I am confident he'll use that opportunity during this trip and will probably do so again in the future, as long as the current situation of high demand, high prices and tight supply continues," Hadley told reporters during a briefing on Bush's May 13-18 trip that will include stops in Israel and Egypt.
Bush will also have a message for domestic consumption, that the United States must diversify into other sources of energy and needs to increase its own oil production capacity, Hadley said.
"Capacity is limited in the Middle East. There are limits to how much that production can be ramped up without enormous investments of dollars and enormous investments of time," Hadley said.
UK Prime Minister Gordon Brown has called for international pressure on oil producers' group Opec to bring oil prices down.
"Clearly oil prices are very high. Clearly also there needs to be some international effort with Opec to get the oil price down," he said in an interview with television channel Sky News.
Brown's comments on Opec were among the strongest he has made on the need for action by oil producers to reduce crude prices, which have fallen back slightly after hitting a record near $120 a barrel last month.
They coincided with remarks by a senior Iranian oil official that oil prices might remain high until the end of the year and were not the result of a shortage of crude in the market.
Brown sees the high cost of petrol and energy as one of the reasons for voter dissatisfaction with his government which led to Brown's Labour Party suffering its worst local election defeat on record last week.
Brown said it was not absolutely clear why the oil price had remained stubbornly high and was rising.
Demand for oil was lower because of lower growth in Europe and the US and lower growth in China than had been predicted at the start of the year, he said.
"So we've got to look very carefully at what is happening in Opec and in oil prices and I think there is a strong case for putting pressure to see if we can get oil prices down," he said.
Iran and other Opec states have repeatedly blamed factors such as the weak US dollar and speculation, not supply issues, for the rise.
Hojjatollah Ghanimifard, international affairs director of the National Iranian Oil Company, told reporters in Tehran yesterday that high oil prices were not caused by a supply shortage, Reuters reported.
Consumer nations such as the US and the UK have previously urged Opec to pump more crude to help cool prices. But Opec has repeatedly rebuffed the calls.
An extinct volcano in the US may hold the key to extending the life of North Sea oilfields and squeezing an extra 17pc of untapped reserves out of them.
Malcolm Wicks, the energy minister, is visiting the site near Jackson City in Mississippi to see how carbon dioxide is extracted deep underground before being piped 60 miles to force out oil from an old field.
With an estimated 25bn barrels of oil equivalent left to exploit in the North Sea, Mr Wicks said it would be increasingly challenging and would need innovative technologies to tap the remaining reserves.
He added: "This project uses pressurised carbon dioxide which could also be captured from industrial plants so it would mean a plus for the environment too."
Denbury Resources, the biggest oil and gas operator in the state, has successfully exploited carbon injection techniques in Mississippi and elsewhere to recover significant quantities of reserves from mature reservoirs, and it believes the technology can be successfully developed in the North Sea.
The Government is anxious to see Britain break into the carbon market to squeeze oil and gas from declining North Sea fields and reduce emissions.
BRUSSELS - The European Union said on Monday it was progressing with efforts to secure gas supplies from Egypt and Iraq as part of the bloc's efforts to reduce its heavy dependence on Russian oil and gas.
Energy Commissioner Andris Piebalgs said 7 billion cubic metres (bcm) of gas had been secured, and progress had been made on developing gas pipelines during a meeting with senior officials from Syria, Egypt, Iraq, Jordan, Lebanon and Turkey.
"Seven billion cubic metres (bcm) from new sources to the European market is not bad from this part of the world," Piebalgs told reporters.
He said 5 bcm of gas was expected to come from Iraq's Akkas field in two or three years - as announced in April - while a further 2 bcm is expected to be piped from Egypt from 2010.
The EU hopes to import Iraqi gas via the planned Nabucco pipeline across Turkey to central Europe as it diversifies gas supplies away from Russia which provides a quarter of its needs.
Officials attending Monday's meeting agreed to forge ahead with the Arab Gas Pipeline which runs from Egypt to Syria and with connections to Iraq, Turkey and the EU by 2009.
"We're also looking in other directions," added Piebalgs. "Azerbaijan and Turkmenistan are not less important for also directly delivering gas to the European Union."
The European Commission said last month it had secured a guarantee of 10 billion cubic metres a year of natural gas from Turkmenistan from 2009 as part of the drive to ensure sufficient supplies to make Nabucco commercially viable.
The pipeline is seen as a rival to the Kremlin-backed South Stream project due eventually to take some 30 billion cubic metres of Russian gas a year to southern Europe.
"Too many people still think we only look north and east when we think of our energy security, but we also of course look south too," said European Commissioner for External Relations Benita Ferrero-Waldner.
"On a bilateral level, I've already signed a joint declaration on energy cooperation with Jordan and we're close to signing an MoU with Egypt on energy and we are also working on another with Iraq," she added.
Ferrero-Waldner is set to launch on Tuesday the EU's Neighbourhood Investment Facility, which will provide over 700 million euros of funding for energy and transport infrastructure between the EU and neighbouring states between 2007 and 2013.
The EU expects the facility to encourage a further 5-6 billion euros of lending for infrastructure projects.
Editing by James Jukwey
· Power generators would be forced to sell off grids
· Call for all new coal plants to have carbon capture
MEPs are expected today to endorse controversial plans to force huge mainland European energy groups to sell off their power transmission networks and open up the EU market to greater competition.
The European parliament's industry, research and energy (ITRE) committee is also expected to stymie alternative proposals to hand over control of the grids to independent operators but allow the groups to retain ownership.
Today's vote will be seen as crucial by British and Spanish groups such as Centrica, owner of British Gas, and Iberdrola, owner of ScottishPower, which have seen their ambitions to break into other markets thwarted by the dominance of "national champions".
Labour MEP Eluned Morgan said that the vote would give a fillip to the proponents of full "ownership unbundling" (separating transmission from generation/supply) and added: "We should be able to deliver a knockout blow to the other, weaker options" - a so-called third way would have given more power to regulators to control grid investment.
The European commission, which favours unbundling as the best way to promote competition and lower energy prices, will use today's vote to toughen its plans in the face of opposition from France, Germany and six other countries that form a blocking minority among the EU's 27 members.
Senior officials have suggested that power grids should at least be controlled by independent operators which would set annual investment plans and raise capital, with the plans overseen by regulators.
But Morgan said this could cement conflicts of interest if generators remained the owners of grids: "We would like to see national regulators given far more powers to fine companies which break the rules, adopt a more stringent approach to appointments and monitor, manage and police the networks. Consumers should also be given much greater influence."
Today's vote will coincide with a call from Chris Davies, a Liberal Democrat MEP, for new coal-fired power plants to be fitted with carbon-capture and storage (CCS) technology by 2030. Fifty new coal-fired plants are planned in Europe over the next five years.
Davies, in charge of negotiations with the commission on CCS, said his strict time frame would help compensate for EU countries' failure to meet their targets for 20%renewables within Europe's energy mix by 2020.
"There's very little likelihood that the UK, above all, will meet its [15%] target," he said. "As matters stand we will probably be halfway to the target at best ... At least if we accelerate CCS we will have made up the ground."
He said CCS could remove 80% of coal emissions.
But he clashed on the issue with the environmental pressure group Greenpeace, which said CCS was a "false promise" and "simply can't deliver in time" because there are no large-scale plants in the world capturing CO2. Whereas renewables that are technically accessible could provide six times more energy than the world now consumes.
Davies said such comments were "divisive and dangerous".
Centrica, the owner of British Gas, is hammering out last-minute details of a joint venture with EDF, the European energy giant, which will see the British owner join EDF's bid for British Energy.
The British Gas owner has struck a side-deal with EDF, Europe's biggest power company, to set up a joint venture vehicle to bid for the UK's biggest nuclear generator. The French company will hold 75 per cent of the joint venture and Centrica will have 25 per cent.
The deal, details of which are still being resolved, will see British Gas receive long-term electricity supply contracts for its 17 million customers.
Today sees the deadline for bids for the Government's 35.2 per cent stake in British Energy and EDF is already understood to have submitted its bid, indicating that it will be partnered by Centrica.
There are hopes in the French and British camps that the two companies will have a clear run at British Energy, as other European utilities appear to be have lost interest after months of jockeying for position between the rivals.
RWE, the German power giant which has already made an indicative offer for the company, could also bid but its interest is thought to be waning since a potential partner, the Swedish company Vattenfall, pulled out.
Initial bids for British Energy are expected to be pitched between 600p and 700p a share, even though the shares are currently trading at 715p and some analysts have said that the company could be worth more than 800p a share.
Despite huge initial interest in the nuclear group from foreign and home grown utilities, the auction appears to have become a damp squib partly because of concerns over the poor operational performance of British Energy's aging and increasingly unreliable plant.
Only one buyer with the financial muscle to swallow up British Energy — EDF — appears to be single minded about bidding. Rival German and Spanish energy giants RWE, E.on and Iberdrola have been nervous about committing to British Energy.
Iberdrola of Spain, which owns ScottishPower, said this week that it would not launch an independent bid, although it may be interested in sharing as a junior partner in another company's bid, or picking up assets that may become available.
Sources close to the negotiations said that today's deadline is only a preliminary one for bidders to provide details of financing arrangements. The Government's advisers, NM Rothschild, have said that they will consider new bids after today, if they are materially better.
EDF and Centrica declined to comment.
Goldman Sachs is representing Centrica in the talks and Merrill Lynch is acting for EDF.
British Energy, whose eight ageing reactors generate roughly a fifth of the UK's electricity, is viewed as a key player in the race to build a new generation of reactors because it owns access to most of the key sites. However, bidders are wary of paying over the odds for the sites, because that could jeopardise the financial viability of new nuclear power stations. It could even end up cheaper to build on greenfield sites.
The Government has said that no bid would be blocked on the ground of nationality. However, it is understood that ministers are keen for whoever wins the auction to sell some sites to a rival to ensure that the future of Britain's nuclear industry does not lie in the hands of one company.
Separately, in a sign of EDF's determination to begin developing nuclear power stations in Britain, it is understood to have bought land in Somerset and Anglesey, next to existing power stations at Wylfa and Hinkley Point, which is large enough to provide space for one of its European pressurised reactors.
Wylfa, on the island of Anglesey, is owned by the Nuclear Decommissioning Authority (NDA) and has already attracted interest for a potential new reactor from other energy groups. Hinkley Point, in the South West of England is owned by the NDA and British Energy.
It is thought that EDF has not yet started applying for planning permission to build reactors on the land.
The Conservatives stepped up the pressure on the government to issue a statement on the "surreptitious auction" of British Energy, by warning that the official silence on the nuclear generator's sale ruled out cross-party consensus on energy security.
Although British Energy has asked companies to submit bids by the end of tomorrow, the company and the government are willing to consider bids that come in after the deadline.
The auction was triggered when the government signalled its willingness to sell its 35.2 per cent stake in the company.
John Hutton, business secretary, has rejected calls to set out his policy on the sale by emphasising that British Energy is a publicly listed company. Alan Duncan, the shadow business secretary, yesterday lambasted this "dismissive . . . [and] rather cavalier" explanation for refusing to comment on a sale of crucial importance to the energy sector, where the government exercised an effective veto.
"Hiding behind commercial confidentiality is not a credible posture to adopt," said Mr Duncan in a letter sent to Mr Hutton yesterday.
"Our energy security . . . should be above party politics. That cannot be so while you remain so secretive about your intentions," he added.
The figures just don't stack up for the argument that new nuclear power
stations will ensure a secure and sustainable energy source
With French and German companies lining up to build new nuclear power stations in Britain, the die now seems cast for nuclear. Or is it?
The government's goal is certainly ambitious. Ten countries - primarily the UK, US, France and Canada, but also including Japan, Korea, Brazil, Argentina, South Africa and Switzerland - have set up the Generation IV International Forum. It will develop a successor nuclear energy system to the previous Generations I (Magnox) and II (advanced gas-cooled reactors and the Sizewell B light water reactor) and follow the Generation III systems now being built. The latter includes the French Areva evolutionary pressure reactor (EPR), the prototype of which is being constructed at Olkiluoto in Finland, with another being built in France.
It is intended that these Generation III models, plus (hopefully) improved versions in future, will lead reactor orders through to 2030, after which it is hoped that Generation IV will kick in, with the goal of nuclear sustainability.
However, the roadmap to get there is beset by practical problems that may prove insurmountable. Generation II and III nuclear plants operate in a "once-through" mode, which means that only half the 0.7% fissionable uranium 235 content of natural uranium goes into the fuel, while most of the heavy metal ends up in enrichment tails and in spent fuel as waste. This, therefore, requires a constant and increasing supply of natural uranium to meet the rising demand for electricity, while intensifying the already unresolved problem of what to do with vast accumulations of radioactive waste.
Even the International Atomic Energy Agency and the optimistic Organisation for Economic Cooperation and Development put the total world uranium reserves at 4.7m tonnes, and that assumes a purchase price of at least $130/kg. In fact, prices are currently nearly twice as high, yet primary uranium production is falling. But even if the figures were roughly correct and not significantly inflated, the total of known uranium resources is expected to be exhausted by 2030. If fast reactors were to be introduced by then, which is the centrepiece of the strategy, a further 10m tonnes - twice the known resources - would have to be ready for production, and this could only come from "speculative and undiscovered resources".
The nuclear power industry answers this by referring to the universality of uranium in the Earth's crust and in sea water. But the enormous energy needed to extract it from these low-concentration sources would exceed the energy output of the fission of the fuel provided.
These pressures are already being felt. The US gets half its nuclear fuel from diluted former nuclear weapons' highly-enriched uranium from Russia. And even Russia, with insufficient primary production, will be forced to rely on ex-weapons material to power its planned expansion. The UK's aim to secure energy supplies will not be aided by importing 100% of nuclear fuels, and that's on top of increased dependence on imported fossil fuels, notably gas.
Meanwhile, Japan has closed seven nuclear power stations built on an earthquake fault line. The Olkiluoto reactor is already two years behind schedule after just two years' building and has a £1bn cost overrun so far, and there can be no reliable evidence on the economics of nuclear power until the new designs of the Westinghouse AP1000 and European EPR water reactors have been fully tested over many years in service. Contrary to claims by the industry, unresolved questions of cost and the looming shortage of uranium are the biggest challenges to the nuclear revival.
To overcome the fragility of this recovery, the industry looks to Generation IV development of the fast reactor by 2030 as the key to ultimate nuclear sustainability. However, if for this purpose the fast reactor were adopted in "breeder" mode, an even greater quantity of highly radioactive actinoids (plutonium, neptunium, americium and curium) would be generated, exacerbating still further the waste management problem. If, on the other hand, the fast reactor were adopted in "burner" mode, as currently seems likely to prevail, the waste problem is alleviated, but there is no sustainability.
The Generation IV fuel systems offer at present six types, of which two are emerging as likely candidates. One is the very high temperature thermal reactor (VHTR), which can be used for coal gasification as well as thermo-chemical hydrogen production. The US government favours this because a hydrogen economy is seen as the solution to the exhaustion of oil reserves, and the petrol derived from it.
The main problem with VHTR, which has a coolant system outlet temperature of about 1,000C, is likely to arise from irradiation characterised by the Wigner effect - the displacement of atoms in a solid caused by neutron radiation - and from progressive disintegration by neutron bombardment. Indeed, a similar problem with the Wigner energy in Pile 1 at Windscale (now Sellafield) caused the fire in 1957 and melted the fuel elements. Given the very high temperatures needed for this complex and quite likely unstable process, its viability would need rigorous and exhaustive testing before such a problematic reactor were ever adopted.
The second favoured Generation IV candidate is the sodium-cooled fast reactor system (SFR). The idea here is that as the supply of natural uranium declines, it is replaced by a plutonium-based fuel that is incrementally augmented by fresh plutonium in a repetitive cycle, providing claims of sustainability. It is envisaged that there is a gain in the plutonium in a surrounding "blanket" of uranium 238 over and above the plutonium consumed in the reaction, with a doubling time of 15 to 20 years.
Again there are two key problems. It is a burner reactor, not a breeder, so that while reducing waste management problems, it does not provide for sustainability. Second, even if fast reactors of this kind could be successfully deployed - a big if - the doubling time of 15 to 20 years would require supplies of natural uranium to be maintained for decades, if not centuries, until the fleet of "once-through" reactors can be progressively replaced. And the uranium simply is not available for that timespan.
So, a nuclear renaissance? Forget it.
· Michael Meacher MP is a former environment minister. guardian.co.uk/environment/nuclearpower
MOSCOW - Russia and the United States signed a pact on Tuesday allowing the world's two biggest atomic powers to boost their nuclear trade and work on new ways to prevent the proliferation of nuclear weapons.
The civilian deal will open up the booming U.S. nuclear market and Russia's vast uranium fields to firms from both countries by removing Cold War restrictions that prevented bilateral trade potentially worth billions of dollars.
U.S. ambassador to Russia, William Burns, signed the deal with the head of Russia's state nuclear corporation, Sergei Kiriyenko, on the last full day of Vladimir Putin's presidency.
"The United States and Russia were once nuclear rivals -- we are today nuclear partners," said Burns.
At the 2006 Group of Eight summit in St Petersburg, President George W. Bush and Putin ordered ministers to reach a deal but it has faced opposition from some U.S. congressmen because of Russia's nuclear cooperation with Iran.
A 123 agreement, so-called because it falls under section 123 of the U.S. Atomic Energy Act, is required before countries can cooperate on nuclear materials.
It is critical to the Global Nuclear Energy Partnership, or GNEP, which the United States and Russia have discussed for more than a year as a way to expand peaceful nuclear energy development and mitigate proliferation risks.
"What this agreement allows us to do is to implement some very creative ideas that both Russia and the United States have put forward to deal with the growing challenge of proliferation of nuclear weapons," Burns said.
He said the deal would allow Washington and Moscow to move forward on proposals for international nuclear fuel centers, which would sell developing countries access to nuclear energy but remove the need for their own enrichment programs.
Russia and the United States control the largest arsenals of nuclear weapons in the world and both have ambitious plans to build hundreds of new reactors for power production.
Some U.S. politicians have said nuclear cooperation with Russia should be shunned because Moscow is helping Iran build an atomic power station, but the Bush administration is keen to have the pact approved this year.
State Department spokesman Sean McCormack said in Washington that now that the deal has been signed, it would be sent to Congress for lawmakers to review "in due course".
When asked about speculation that Bush may not submit the deal to Congress -- possibly leaving it for the next president to do -- McCormack said: "Usually we don't sign agreements we don't intend to send to Congress for ratification."
Once the agreement is sent to lawmakers, it would go into force if Congress did not pass a disapproval resolution within 90 legislative days. Russia's parliament, controlled by Putin's party, must also ratify the treaty.
Russia, one of the world's biggest sellers of enrichment services, has been trying to break into the nuclear markets of the United States and European Union.
"The signing of this agreement opens a gigantic field of opportunities for the economic cooperation in the large and growing businesses linked to the civilian use of nuclear energy," Kiriyenko said after the signing.
Tuesday's agreement simplifies life for companies in both countries and allows them to strike deals on trade in nuclear materials directly among themselves.
Putin has reformed Russia's nuclear sector to boost competition and open it up to atomic firms such as Japan's Toshiba Corp, which owns U.S.-based Westinghouse Electric.
Russia has crafted a nuclear behemoth called Atomenergoprom -- which officials say is an atomic version of Russian gas giant Gazprom -- to compete with the biggest nuclear companies on the world market.
Additional reporting by Susan Cornwell in Washington; Editing by Sami Aboudi
The head of the United Nations World Food Program, Josette Sheeran, Tuesday said the current food price crisis is the first global hunger emergency. VOA's Barry Wood reports that Sheeran called for cooperative action to alleviate the problem.
Speaking at Washington's Peterson Institute, Sheeran said the increase in food prices is costing the lives of 250,000 people every 10 days. Up to 100 million people are being pushed back into poverty by what has been often a doubling of food prices over the past year. Sheeran, who heads the Rome-based World Food Program, said the world's poorest are the most vulnerable.
"Countries that are most at risk are developing nations that are import dependent and already experiencing an additional shock from conflict, drought, floods or storms," she said. "Think here: Afghanistan, Somalia, Haiti, Burundi, Mauritania, and others."
Sheeran said that the cyclone that has ravaged Burma may have devastated that Asian nation's principal rice-producing area. Rice prices have gone up 250 percent in the past year while wheat has doubled and corn is up 50 percent. While world grain stocks are at their lowest level in 30 years, Sheeran said much of the price spike is due to panic buying and export bans in several countries.
"A range of major food exporters have put blocks on exports almost overnight; from China, Vietnam, Argentina, to Kazakhstan," she said. "This global rash of "beggar thy neighbor" [protectionist] responses will not provide a solution. In addition, many countries who can afford to are stockpiling, further tightening supply and driving up prices."
Sheeran outlined numerous causes for the sudden rise in prices. These include the rapid increase in oil prices - a major input for fertilizer as well as fuel for tractors and transportation, the proliferation of food for fuel programs, natural disasters, and increasing demand. She is not optimistic that prices will fall significantly over the next three years. Sheeran, who recently visited the Riff Valley of Kenya, is alarmed that farmers there are reducing their plantings.
"Fertilizer has gone from 1,700 shillings there in December to 4,000 shillings just 12 weeks later," said Sheeran. "This, in the bread basket of Kenya, farmers are planting one third of what they planted a year ago."
Sheeran said that supply concerns have resulted in 12,000 tons of food her agency purchased in Kenya for emergency feeding in Somalia being stranded in Kenya. She said immediate action is needed to get food aid to the hungry.
Increases push farmers to plant different crops. Farmers like 80-year-old Joe Dement say it's becoming too financially risky to plant corn this year.
Despite high food prices for corn, the prices of essentials such as fertilizer have more than doubled in the past few months, cutting into the wallets of the state's farmers and further raising the risks associated with a life spent in agriculture.
In response, farmers like Dement are choosing to plant soybeans instead of corn because it uses less fertilizer.
The prices of fertilizer, essential for maximizing a crop's potential, have gone up because of more worldwide demand, high freight rates and stubbornly high natural gas prices, according to the Tennessee Farmers Cooperative, owned by 70,000 farmers in the state.
"The cost of putting out the crops is more daunting this year," said Delton C. Gerloff, agricultural economics professor at the University of Tennessee-Knoxville.
For example, DAP, a fertilizer used for beans, corn, pastures and cotton, sold last year for $398 a ton. This year, it sells for $1,000 a ton, according to Arkansas-based Oakley Fertilizer Inc.
Local farmers of a broad range of crops say they're hurt by the price increases.
But analysts said farmers who raise cattle may be hurt the most, because of the need to fertilize pastures and the fact that high grain prices used to feed cattle have outstripped the sales prices for beef cattle.
"This is one of those years where you're just going to have to hang in there," said Ronnie Barron, the University of Tennessee's extension agent for agriculture programs in Cheatham County.
"When you take into account extremely high fertilizer prices, it pretty much wipes out that profit margin."
Tennessee crops and pastures rely on fertilizers made from nitrogen, phosphorous and potassium, and these ingredients can boost yields 20 percent to 25 percent on average, said associate professor Hugh Savoy at the University of Tennessee-Knoxville.
Big fertilizer producers such as Calgary, Alberta-based Agrium Inc. have seen a financial boon with the rising prices. Agrium Inc.said its first-quarter net earnings jumped to $195 million, up from a net loss of $11 million a year ago.
"There is certainly tightness in the market, and at times we need to manage how much you commit to," said Ashley Harris, an Agrium spokesman. Agrium is evaluating plans to expand its potash operations and will complete a nitrogen plant in Egypt in 2010.
"We still see a healthy margin for the farmers and that is proven by the healthy demand for the products," Harris said.
Already, some analysts are saying some agricultural stocks such as Potash Corp. of Saskatchewan Inc. do have the potential to continue to grow because of higher food demand from countries such as China.
"I think the sector in general has plenty of growth left ahead of it," said Morningstar agricultural stock analyst Ben Johnson in Chicago.
Gerloff said this is a crucial year for farmers in part because many are trying to recover from reduced crop yields last year due to drought, and now they're dealing with higher fuel and fertilizer costs.
Dement, who had a normal yield on only about one-third of his soybean crop last year because of the drought, said he hopes to have better results on his 150 acres of this year.
"That's the beauty of farming: We're the biggest gamblers on earth," the Lascassas farmer said. "We pay our good money for seeds and fertilizers and pray for rain. Generally the odds are against us."
South-east Asian nations agreed at the weekend to co-operate more closely to stabilise regional rice prices and on measures to boost productivity in how the staple was grown, harvested and distributed, Indonesia’s trade minister said.
Mari Pangestu told the Financial Times after a meeting of economic ministers from the Association of South-East Asian Nations (Asean) in Bali that the members would now operate in ways that should prevent rice prices from continuing their climb of the past four months.
She also stressed that neither Asean nor a sub-grouping of its members were seeking to create an Opec-style price-fixing cartel for rice, as Thailand suggested last week. In a statement, the ministers said they “pledged to continue fair trade practices and to achieve an orderly regional rice trade”.
Asian rice prices have almost trebled this year and several countries, including Indonesia and India, have imposed export curbs to protect their domestic markets.
Asean includes Thailand and Vietnam, two of the world’s largest rice exporters, and the Philippines, one of the largest importers. The other members are Indonesia, Brunei, Singapore, Cambodia, Laos, Malaysia and Burma.
Ms Pangestu said that while the meeting did not propose concrete measures, it showed “political commitment” by Asean and each of the member countries to undertake policies that would prevent prices spiking.
“There’s a realisation that what they do can send signals that lead to prices not being as stable as they should be,” she said. “We all agreed we don’t want a disorderly regional rice trade and that we should help each other out and communicate better.”
The Philippines has especially been the target of criticism for driving prices higher by announcing large import needs far in advance, while the decision by Indonesia and Vietnam to restrict their rice exports is also seen as having fuelled the price rise.
Thailand, Vietnam, Cambodia, Burma and Laos clarified to other Asean members that their co-operation plans were not the beginnings of a price-fixing cartel but merely the deepening of an existing mechanism involving companies to “share information on boosting productivity and marketing”, Ms Pangestu said.
Samak Sundaravej, the Thai prime minister, said on Wednesday after meeting Thein Sein, the Burmese prime minister, that it would make sense for the five nations to co-operate on managing rice prices.
The economic ministers meeting in Bali also agreed to share technology, research and experience to boost productivity by making the whole rice supply chain more efficient, from irrigation through harvesting practices to distribution, their statement said.
Making more land available for growing rice was also proposed.
Ministers expressed concern that longer-term rice shortages might have an impact on regional economies.
Ms Pangestu said ministers also continued negotiations with Australia and New Zealand and with India on deals to liberalise trade. She expressed optimism that both agreements could be finalised by August.
The ministers also discussed the Asean economic community blueprint. This is the first year that Asean countries have actions that must be achieved by certain target dates, although no sanctions have been agreed for those members that fail to meet their goals.
A call for a general strike in Egypt on Sunday to protest against high prices went largely unheeded, but police were out in force to pre-empt any public demonstrations, Heba Saleh reports from Cairo.
There was a heavy security presence in central Cairo and in the town of Mahalla El Kobra, where last month protesters clashed with police after a similar attempt at a stoppage. The strike was called by liberal and leftwing activists who used the social networking website Facebook to spread their message.
Saudi Arabia moved on Monday to create facilities to stockpile basic staples and said it would increase global investments to ensure its long-term food security.
The move comes amid rising food prices which have contributed to a near 30-year high inflation in the world's largest oil exporter.
The Saudi cabinet asked the Industry and Trade Ministry to swiftly provide land for the construction of warehouses for the stockpiling of foodstuffs by the private sector, the official Saudi Press Agency (SPA) reported.
The cabinet also approved plans to coordinate state and private sector activities and to increase Saudi investments overseas in fisheries, livestock and food production to supply the markets of the desert kingdom of 25 million people, the agency said. It did not give details of the plan.
Saudi Arabia has confirmed plans to import wheat and gradually stop purchases of the grain from local farmers to conserve water, abandoning a 30-year programme to grow wheat that achieved self-sufficiency but depleted the country's scarce water supplies.
Last month, Saudi Arabia cut import tariffs on food and building materials, after inflation almost doubled in the six months to February. The cabinet cut duties on food products such as frozen poultry, dairy goods and vegetable oils to 5% from about 20%.
Saudi Arabia has said it is committed to pegging its riyal currency to the dollar, even though the US currency's persistent decline through record lows against the euro is driving up import costs.
Since December, Saudi Arabia has introduced cost of living allowances for public sector employees, boosted subsidies on rice, baby milk and other products and introduced welfare payments.
The UAE said on Monday it plans to buy farms in Pakistan in a bid to reduce the impact of export bans and spiralling food prices.
Oil has broken through the $120 mark for the first time in a move that experts warn may snuff out any post-credit crisis economic recovery.
The influential Ernst & Young Item Club warned that rising oil prices may force it to slash its growth forecast for next year dramatically, and could cause inflation to as much as double. It came as crude prices passed through the $120 mark yesterday for the first time on record, amid fears about disruptions to the supply in Nigeria and Iraq.
US light sweet crude rose to a record $120.21 a barrel during morning trading in New York yesterday but had eased to $119.67 a barrel early this morning. The increase is expected to push petrol pump prices higher in the coming weeks.
If oil prices remain at their current levels the Item Club warned that it will have to cut its economic growth forecast for next year from 1.5pc to an anaemic 1.3pc. Inflation would also be higher than 3pc for the next three years, it added.
The news is a further blow for Alistair Darling, whose Budget forecasts - which include a projection of 2.25pc economic growth next year - have been widely derided by economists.
Hetal Mehta, of the Item Club, said: "If [the oil price] hits $200 per barrel, as one Opec minister recently predicted, then frankly all bets may well be off."
In those circumstances, she said, Britain could suffer a high street recession next year, with consumer spending shrinking by 0.1pc.
Such an increase would mean the overall economy would grow by a mere 0.9pc in 2009. The club said inflation, as measured by the Consumer Price Index, would more than double to 5.9pc. The CPI is currently at 2.5pc - above the Bank of England's 2pc target.
Ms Mehta added: "With oil permanently at $200 the Governor of the Bank of England would be suffering from writers' cramp with the number of letters he would have to write to the Chancellor explaining why the UK economy had breached the target."
The rise in oil prices comes as Britain faces its worst economic outlook in a decade and a half.
Many economists have dubbed 2009 a crunch year for Britain, as the effects of the housing market slowdown and an anticipated increase in unemployment weigh on consumers' spending habits.
The Item Club had forecast that growth would bounce back to an annual rate of 2.7pc by 2010, but said this was based on oil prices dropping back to beneath $80 a barrel. It warned that its growth expectations would be sharply eroded the longer oil prices remain high.
Jeremy Warner's Outlook: With utility bills likely to rise another 30-40 per cent, oil still has the power to shock
Oil prices again hit new records yesterday, making the once implausible Goldman Sachs forecast of a "super-cycle" that would drive them to $200 a barrel or more seem alarmingly credible.
They also provide a major headache for the Bank of England's Monetary Policy Committee, which meets this week for its monthly deliberations on interest rates. The fast slowing economy would argue for another cut, as indeed in some respects would the deflationary effect of higher energy prices.
More money spent on petrol and utility bills means less for other things at a time when credit is no longer available to mitigate the consequent squeeze on disposable incomes. Unfortunately, higher oil prices also add to inflation. Whereas the current inflationary spike was expected to ease by the second half of this year, this now looks much less certain.
Next week's Quarterly Inflation Report is likely to point to a worsening medium-term outlook for inflation. Energy retailers are already warning that unless the oil price eases soon, consumers should brace themselves for gas and electricity prices some 30 to 40 per cent higher going into next winter than current, already inflated levels.
The Government is powerless to prevent these rises, despite the clear political damage it is doing to Labour at the ballot box. Retail prices are determined by the wholesale market. If Britain isn't prepared to pay the market price, the oil and gas will simply go somewhere which is.
Subsidising energy prices through the public purse, as occurs in some countries, is not a realistic option for Britain. Higher utility bills might be painful to electoral prospects, but it is still better that the big, bad oil and utility companies get at least some of the blame than that the Government gets all of it by raising taxes to pay for a subsidy.
Meanwhile, virtually everything else seems to be going up in price too, from food to mortgages, and thanks to the weak pound, even flat-screen TVs and cheap clothing from China. There is only so far retailers can go in protecting the public from these inflationary shocks by absorbing the effect in their profit margins.
About the only thing not inflating merrily away is wages, which though a consolation for the MPC, encouraging it to believe there will be no second round inflationary effects from oil, food and goods, looks like a sick joke to everyone else. Disposable incomes seem ever more squeezed.
The Government's ineffectual approach to energy policy hardly helps matters. Instead of focusing in a timely fashion on the likelihood of looming energy shortages, it instead concentrated on socially meaningless targeting of so-called "energy poverty". Steeply rising utility bills have blown out of the water any hope ministers might have had of achieving these goals.
One positive to come out of high energy prices is that they force households to reduce their consumption. According to data from Centrica, in the 1970s the average temperature of a British house over the year was 12 degrees. Today it is 19. Yet though it is relatively easy to cut back on the first 10 per cent of consumption, it becomes much tougher thereafter, requiring significant investment in energy-saving materials and devices.
The Government might also be faulted on the way it has chosen to meet emission reduction targets and, in particular, its target of 20 per cent of supply from renewables by 2020.
The target implies massive investment in wind power in a manner which will require equally substantial subsidy, either through prices or directly from the public purse. More pain, then, for the beleaguered householder. Is this really the most cost effective way of achieving the desired reduction in emissions? It seems ever more questionable.
WASHINGTON - Higher U.S. gasoline prices and a slowing economy will cut into U.S. oil demand through the summer driving season much more than previously thought, the government's top energy forecasting agency said on Tuesday.
"Based on projections of weak economic growth and record high crude oil and product prices, (petroleum) consumption is projected to decline," the Energy Information Administration said in its latest monthly forecast.
Thanks to rising crude oil costs, U.S. drivers will pay an average $3.66 a gallon for gasoline this summer, up 12 cents from earlier estimates, the Energy Department's analytical arm said.
Pump prices are expected to peak at $3.73 a gallon in June, 11 cents more than previously projected, the agency said.
Gasoline prices will be higher due to expensive crude oil, which the EIA said it now expected will average $110 a barrel this year, about $9 more than the agency forecast last month.
The price of U.S. crude hit a record $122.73 a barrel on Tuesday at the New York Mercantile Exchange, as the national price for regular, self-service gasoline set a new of record $3.61 a gallon this week.
High fuel costs, along with a sputtering economy, will take an even bigger bite out of gasoline consumption, which was already forecast to decline from last summer's levels.
"The gasoline (situation) we're facing here in the U.S. is not something we've seen in 20 years, where we have these high prices on top of a weak economy," said EIA analyst Tancred Lidderdale. "Both are unquestionably taking their toll."
The EIA said it expected total petroleum demand, which includes gasoline, diesel fuel and jet fuel, in the current quarter to be 90,000 barrels a day less than last month's forecast and down 170,000 barrels a day compared to the second quarter of last year.
Petroleum consumption in the upcoming third quarter was revised down by 100,000 barrels a day, increasing just 10,000 barrels per day from the third quarter of 2007, the EIA said.
For all of 2008, demand will decline by 190,000 barrels a day, 90,000 barrels per day more than the agency said in last month's forecast.
By contrast, world oil consumption is forecast to grow by 1.2 million barrels per day this year, with most of the increase in demand led by China, Middle East oil producing countries, Russia, Brazil and India, the EIA said.
Lidderdale said oil demand is strong in China because of its growing economy while OPEC member countries in the Middle East are flush with dollars earned from oil exports, and therefore are on a spending and building spree, using more energy in the process.
Oil demand in the major industrialized countries is projected to change little this year, with higher oil use in Europe offsetting declining consumption in the United States, the agency said.
A combination of rising global oil demand, fairly normal crude inventories and low unused oil production capacity will provide "firm support" for petroleum prices, the EIA said.
Editing by Christian Wiessner
People are needlessly throwing away 3.6m tonnes of food each year in England and Wales, research suggests.
The Waste & Resources Action Programme (WRAP) found that salad, fruit and bread were most commonly wasted and 60% of all dumped food was untouched.
The study analysed the waste disposed of by 2,138 households.
Environment Minister Joan Ruddock said the findings were "staggering" at a time of global food shortages and WRAP added it was an environmental issue.
'Value of food'
The study found that £9bn of avoidable food waste was disposed of in England and Wales each year.
It is mostly food that could have been consumed if it had been better stored or managed, or had not been left uneaten on a plate.
Much of that food waste goes into landfill rather than into council food disposal and composting programmes, it said. There are climate change costs to all of us of growing, processing, packaging, transporting, and refrigerating food that only ends up in the bin
Joan Ruddock, Environment Minister
Based on the data for England and Wales, WRAP estimated that householders across the UK throw away £10.2bn of avoidable food waste every year.
Using the same extrapolation, they also estimated the average UK household needlessly throws away 18% of all food purchased. Families with children throw away 27%.
The study also suggested £1bn worth of food wasted in the UK was still "in date".
Nearly a quarter, in terms of cost, was disposed of because the "use by" or "best before" date had expired.
Liz Goodwin, chief executive of WRAP, said food waste had "a significant environmental impact.
"What shocked me the most was the cost of our food waste at a time of rising food bills, and generally a tighter pull on our purse strings," Ms Goodwin said.
"It highlights that this is an economic and social issue, as well as about how much we understand the value of our food."
Yoghurts and chickens
The study also found that:
Bakery goods made up 19%, by weight, of all avoidable food waste. Vegetables contributed 18%.
Meat and fish also made up a large proportion - 18% - of the total money wasted on food. WRAP said 5,500 whole chickens were thrown away each day in the UK.
WRAP receives government funding from England, Scotland, Wales and Northern Ireland.
The body says The Food We Waste survey is the first of its kind in the world, surveying both household habits and the actual waste they throw away.
The survey interviewed 2,715 households in England and Wales and several weeks later, analysed the rubbish of 2,138 of them.
Ms Ruddock said: "This is costing consumers three times over.
"Not only do they pay hard-earned money for food they don't eat, there is also the cost of dealing with the waste this creates.
"And there are climate change costs to all of us of growing, processing, packaging, transporting, and refrigerating food that only ends up in the bin."
Britain is not going green according to official figures which show more and more people are travelling by car and aeroplane while less than a third of rubbish is being recycled.
A new report by the Office for National Statistics (ONS) has disclosed that the number of people flying from the country's airports has risen "substantially" in recent years despite increasing public awareness of the impact of carbon emissions on the environment.
Its figures show total passenger numbers at UK airports rose by 54m between 2001 and 2006, with Stansted seeing 10m more travellers and some regional airports such as Liverpool, Nottingham and Bristol doubling their numbers.
Paul Vickers, deputy head of regional statistics for the ONS, said: "This shows the impact of cheap airlines and the use of local airports."
At the same time, the number of people taking to the roads has increased in spite of Government proposals to reduce pollution by encouraging public transport use.
New car registrations increased by 13 per cent between 1996 and 2006, while the proportion of households which have no access to a car has fallen to 25 per cent from 27 per cent.
In addition, one in three households (31 per cent) across the country now have two or more cars, an increase from 28 per cent since 2000.
The average distance travelled by car has remained the same in recent years, as have traffic levels on Britain's roads.
More than two-thirds of people travel to work by car or van, while one in three children is driven to school.
Cycling use has also fallen by 12 per cent over the past decade while bus use in the south east has decreased by a quarter.
Although recycling levels have increased in recent years, only three of Britain's 13 regions are recycling more than a third of their rubbish. The Government wants 40 per cent of waste to be recycled by 2010.
The total amount thrown out by households across the country has remained "more or less constant" despite pleas by town halls for more waste to be sent for recycling or composted, and efforts by manufacturers to use less packaging.
Wild bird populations, seen by the ONS as "good indicators" of the state of the environment, have also declined across the country, with a 15 per cent fall in farmland bird numbers in the south east and west midlands between 1994 and 2005, and a 10 per cent decrease in woodland birds in the south east over the same period.
The Shadow Secretary of State for Environment, Food and Rural Affairs, Peter Ainsworth, said: "Government should be making it easier to go green not more difficult but too often it has failed to help people make green choices with poor public transport and extra regulations.
"They have failed to lead by example with carbon emissions rising in the majority of Government departments and most are less energy efficient than a decade ago."
A leaked government memo to British MEPs about how the UK plans to reach the EU's ambitious target of increasing its use of renewables in energy consumption tenfold to 15% by 2020 from the current 1.5% has provoked anger and disbelief among green campaigners.
"Lazy, short-sighted and irresponsible," is how Caroline Lucas, Green MEP, describes it.
The memo recommits Britain to its target (part of an overall EU one of 20%) but is shot through with references to "cost-efficiency" (seven) and "flexibility" (14) - and demands more of both, with officials refusing to say what that means. It suggests that ministers plan to trade their way to the target, importing renewable energy from elsewhere in the EU - Romania perhaps - and even outside Europe.
The government is even demanding relaxation of proposed rules governing the admission of large-scale projects such as the Severn Barrage towards the meeting the targets - even if they are not fully operational until after 2020. "They now want to extend this and weaken the criteria even further after exerting pressure to include this clause in the renewables directive," said Frauke Thies, EU renewables campaigner at Greenpeace. "They're trying to water it down here and every which way. And their trading plans will meet a lot of resistance."
Lucas says it "beggars belief" that the government is failing to meet the UK's potential for renewables, "shutting its eyes, closing its ears and burying its head" towards all the arguments in favour of incentives for investment - unlike the Germans whose feed-in tariffs have produced a surge in solar and wind power.
Malcolm Wicks, energy minister, insists that the commitment hasn't wavered and Britain has taken just 20 months to produce the second gigawatt (GW) of wind power when the first one took 14 years, putting it on course to be the world's leading offshore wind park. But any energy package has to take "pragmatic" account of the costs: an extra €25.6bn for the EU by 2020 when Britain's share will be €6.7bn or a quarter compared with the comparable cost of fossil fuels.
In March last year the EU summit proclaimed policies and targets designed to make the bloc a global leader in fighting global warming, handing a "first mover" role to its companies. Sadly, not only has Britain failed to match this enthusiasm but rowed substantially backwards since. It's not for nothing that senior UK officials admit that the reality of the credit crunch and economic slowdown has tempered that ardour - and across the EU as a whole.
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